Jun-Yeon Lee
March 2009
Journal of the Academy of Business & Economics;2009, Vol. 9 Issue 2, p123
Academic Journal
We examine a periodic-review stochastic inventory model with quantity discounts from the buyer's perspective. In each period the buyer places an order to meet stochastic demands and receives a price discount on purchases in excess of a price break point. Our analytical and computational results suggest that the buyer's optimal order-up-to inventory levels depend on initial inventory and the price break point. We also provide some counter-intuitive results, compared with the traditional multi-period newsvendor model.


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